Facade Preservation Easement Program
March 1, 2005
Do you own a residence or commercial property that is within the boundary of a National Registered Historic District or local historic district? Do you have property that is individually listed in the National Register of Historic Places? If so, you may be entitled to a significant federal income tax deduction.
Approximately fifteen percent of the present fairmarket appraised value of a qualifying historic residential property can be “donated” by the homeowner as a non-cash charitable contribution by granting a Façade Preservation Easement to the Landmarks Preservation Council of Illinois (“LPCI”). Commercial and multi-unit properties may be able to calculate a similar “donation” by factoring in potential lost development rights after the granting of a Preservation Easement. The “donation” is reflected on the owner’s federal income tax return as a noncash charitable contribution deduction (IRS tax form #8283).
Here’s how it would work, assuming a qualifying residence with an appraised value of $1 million: the property owner may be able to reflect, after granting a Preservation Easement to the LPCI, a non-cash charitable contribution on the property owner’s federal income tax return of $150,000, resulting in significant tax savings. Aside from the immediate tax benefit for property owners, the Preservation Easement is an opportunity for property owners to insure that the qualifying structure’s exterior is maintained in a manner that is consistent with its original architecture.
The LPCI is the federally recognized not-for-profit conservation organization in Illinois authorized to accept donations of Preservation Easements. The contribution is formalized in a Preservation Easement Agreement. This is an agreement between the property owner and the LPCI. It governs the relationship between the owner and the LPCI. Changes to the structure’s interior are typically not subject to regulation under a Preservation Easement.
Levenfeld Pearlstein has developed a relationship with the LPCI, representing both the organization and property owners in documenting Preservation Easements. In addition, in light of the nature of the contribution and its tax implications, our tax attorneys have worked closely with property owners and their tax professionals to maximize the benefit.
If you are interested in learning more about the Façade Preservation Easement Program offered by the LPCI, please contact either of the following individuals:
Keith A Ross, Levenfeld Pearlstein – 312.476.7549
Andrew Fisher, Landmark Preservation Council of Illinois – 312.922.1742